Problems requiring the Simpol approach

Climate Change

The main way to address climate change is through reducing our global carbon emissions – most experts agree on that. But even though we know that, the pace of change is very slow. Very few countries are actively reducing their emissions at the rate required. Why?

For any country to reduce its emissions, it will need to make substantial changes - pass laws and legislation that regulate and reduce the emissions of big business.

But if they do that, they run a risk - a risk that those businesses will just take their operations and thousands of jobs to a country that doesn’t have such strict rules and regulations.

In effect that country will have made themselves economically uncompetitive in comparison to countries with fewer regulations. This is why we see countries being really slow to reduce their emissions, or some countries pulling out of climate agreements altogether.

Tax Avoidance and Tax Competition

The rate of corporation tax around the world has been in steep decline for some time – falling 37% in 37 years between 1980 and 2017. Good news if you own a business, not so great for the rest of us. Why? Because the less businesses contribute in taxes to the countries they operate in, the less those governments have to spend on public services like schools, hospitals, and public transport.

So why has the rate of corporation tax been falling so steadily for so long?

The main reason is Destructive Global Competition. Governments want to attract the capital and investment of big businesses, so they cut their corporation tax rates to lure them in. Of course, when one government does it, others feel compelled to do the same.

It’s a tit-for-tat race that sees country after country making big cuts to the money businesses could be paying in tax, and those businesses profiting as a result.

It’s this same need to stay attractive to business that sees nations turning a blind eye to Tax Avoidance – when those same businesses exploit loopholes in legislation to avoid paying the little tax they do owe. Most nations are deliberately slow to recognise when avoidance is taking place, and when they do, they don’t do much about it.

Nuclear disarmament

Nuclear disarmament is the ultimate ‘Prisoner’s Dilemma’ – it would be better for all of us if every country decommissioned their weapons, but no nation is going to be the first to do it. No nation wants to leave a rival with a military advantage, despite the global catastrophe of a potential nuclear war.

The reasons for the development of nuclear and other weapons of mass destruction are not always directly linked to Destructive Global Competition. However, what stimulates tensions between nations to the point of war is wealth inequality and competition for resources. In a world where destructive global competition widens the gap between rich and poor, tensions between nations rise, and war looms. And so everyone hangs on to what they’ve got, or even increases the development of their weapons.

Is it any wonder that isolated nations like North Korea pursue nuclear development at all costs? And why, even after the terrible atrocities of the past, no agreement for everyone to disarm has ever been reached?

This is the place where a Simultaneous Policy really could do the most good – where every country could agree to disarm at exactly the same time, and agree enforcement measures to keep it that way, so leaving the world a much safer place to live in.

Financial Market Regulation

How do you solve a problem like mobile financial markets? It’s hard to think of them without thinking about the ‘casino economy’ that has been built around them. In an economic culture that encourages taking big risks to make even bigger profits, it’s always citizens who end up footing the bill when things go wrong.

Mobile financial markets aren’t just vulnerable to bad behaviour from within. Terrorism, trafficking and international crime syndicates thrive in an economy that makes laundering money easy through Tax Havens. In the context of Destructive Global Competition, the free movement of capital within these markets is only making it harder for nations to introduce regulatory measures without incurring costs to themselves.

What’s missing is global regulation. Ideas such as a ‘Tobin Tax’ on all financial transactions have been suggested to keep the markets in check, but only global and simultaneous implementation of that kind of tax would guarantee its success.

Sustainable business

We all want corporations to act responsibly and sustainably. If they do, they’re more likely to attract our custom, our loyalty, and even our talent.

But corporations operate in a global market – their shares are quoted on global stock markets, and they are open to competition from others around the world. In this globally competitive market, any responsible or sustainable action a business takes which risks reducing profits can put them at a disadvantage to competitors. The question becomes – can a business afford to act responsibly, if competitors aren’t doing the same?

Without appropriate global regulation, even the most ethical businesses will limit their responsible choices to those that don’t undermine profits. This is why the scope of sustainable or responsible business is so limited, and why we only ever see a few businesses really act sustainably if it can give them a market edge.

So how can we make ALL businesses behave responsibly and sustainably? There is no viable alternative other than the simultaneous implementation of appropriate global regulations.

Immigration

In the Western world, immigration policy is still the winning, or losing, ticket for political campaigning. How to cope with the movement of people across borders is the question on everyone’s lips.

There are lots of pros and cons to immigration, and even more reasons behind it. Whether displaced by conflict, responding to economic insecurity, or simply embracing the idea of being a global citizen, it is the unregulated nature of human movement across borders that drives popular resentment, debate in parliaments, newspapers and living rooms around the world.

Destructive Global Competition makes the issue even more complicated. By driving nations to reduce corporation taxes and pursue business capital at all costs, it widens the gap between rich and poor. In a climate of extreme wealth inequality, every struggle is worse, conflicts between and within nations increase, and people naturally migrate in response – often across borders.

Global cooperation – both to manage the flow of people and to address the systemic issues behind that movement – is the only obvious and lasting solution.